On 30 April 2015, a new Financial Services Expedited Arbitration Procedure (the “New Procedure”) was launched by the Financial Sector of the London Arbitration Club (the “Club”).
The New Procedure is a product of consultations with experienced arbitrators, mediators, judges and arbitral institutions and the Panel of Recognised International Market Experts in Finance (PRIME). It is intended to supplement the standard rules of major arbitration institutions such as the International Chamber of Commerce (“ICC”), the London Court of International Arbitration (“LCIA”), the International Center for Dispute Resolution (“ICDR”) and certain regional arbitration centre rules.
The New Procedure is available for download from the Arbitration Club’s website: http://arbitrationclub.org.uk/financial-sector/eplaunch.
Interestingly, each clause of the New Procedure is capable of standing alone, allowing users to create a bespoke procedure to suit their circumstances. In particular, the New Procedure proposes an expedited time frame for the service of pleadings, with the claimant to serve its statement of case and the evidence relied upon (including witness and expert evidence) one week after it is notified that the tribunal has been formed, the respondent to serve its defence and counterclaim four weeks after that, and any statement of reply to be served just two weeks later. The following are examples of other measures offered by the New Procedure:
- A requirement that all pleadings, witness statements and expert reports are concise, and that pleadings are limited to a maximum of 20 pages;
- Dispensing with document discovery;
- Hearings should only be held if requested by a party and deemed necessary by the tribunal;
- Oral evidence and cross-examination are to be used in exceptional circumstances only;
- Hearings (if required) are to be held within four months of the formation of the tribunal;
- The tribunal should give the reasons for its award in summary form only; and,
- An overall length of proceedings of 21 weeks from the service of the response to the request for arbitration plus the length of any hearing where one arbitrator is use, and 22 weeks where the arbitral tribunal consists of three arbitrators.
The parties can pick and choose from among these provisions to design a procedure that works for them, within the framework of the arbitral institution rules of their choice (within any limits set by those rules).
The New Procedure is an interesting development and offers financial institutions an alternative to court litigation, but it will not be suitable for all disputes in the sector. It will be important to assess on a case by case basis whether the clauses offer the best means of dispute resolution, and to take advice to ensure that the rules are compatible with local arbitration law and the institutional rules selected.